There's a lot of fear swirling about as investors wonder what the future holds not only for the U.S.'s economy, but for the world economy as well. With talks of Greece defaulting and causing financial troubles for Europe, and talks of a possible U.S. default, it's not surprising that investors may be wondering which, if any, stocks are safe. Although no stock can be guaranteed as "safe," there are a few that are more likely to weather this storm unscathed than others.
Safety deposit box stocks
When I think of ultra-safe stocks, I think of blue-chip companies like General Electric and IBM that have been around for a while, have highly recognizable names, and have pretty strong financials. Given that they have a history of getting through tough times before, companies that meet these criteria are in a better position to make it through economic upheavals.
As I see it, big, well-known blue chips represent relatively safe investment prospects for the future, even if the economy turns downward again. And my personal favorite among blue chips is Coca-Cola
So much more than deliciousness in a can
Though it competes Dr Pepper Snapple
Add to Coke's popularity a delicious 125-year-old soda recipe that billions of people love, a strong presence in Asia and Europe, a market share of 42%, and Coke and Diet Coke taking the No. 1 and No. 2 positions for total sales, and you're looking at a highly stable company that is capable of weathering an economic storm. By contrast, Pepsi only has 29% market share, while Dr Pepper Snapple comes in at just 17%.
Coke has also seen great sales and dividend growth over the past year, which shows that even though it's a giant in its industry, it still has room to grow. Just look at Coke's sales and dividends per share growth over the past three years.
|
Sales (billions) |
Sales Growth From Previous Year |
Dividends Per Share |
Dividend Growth From Previous Year |
|
|---|---|---|---|---|
| 2010 | $35.1 | 13.3% | $1.76 | 7.3% |
| 2009 | $31.0 | (3%) | $1.64 | 7.9% |
| 2008 | $31.9 | 10.7% | $1.52 | 11.8% |
Source: Motley Fool CAPS.
Blue chips and the future
Blue-chip stocks may not be the most exciting stocks to buy into, as it's highly unlikely that they're going to take off overnight and bring in massive returns. But that doesn't mean they're not some of the safest stock investments out there. And with troubled news dancing on the horizon like a puppet of doom, every portfolio could benefit from a little security.
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